Gold (XAU/USD) extended its uptrend for the third straight day on Wednesday (22/1) and climbed beyond the $2,750 level, hitting its highest level since early November during the Asian session. US President Donald Trump's tariff threats turned out to be the key factor driving flows towards the safe haven metal. Adding to this, bets that the Federal Reserve (Fed) will cut interest rates twice this year lent support to the non-yielding yellow metal.

Meanwhile, the intraday positive move seemed largely unaffected by the prevailing risk sentiment. Even a modest uptick in the US Treasury bond yields, which helped the US Dollar (USD) stage a modest recovery from two-week lows, did little to dent the bullish sentiment surrounding Gold prices. This, along with the overnight break above the $2,720 supply zone, supports prospects for a further near-term appreciating move for XAU/USD.

From a technical perspective, the overnight break through the $2,720 supply zone was seen as a fresh trigger for bullish traders. Given that the oscillators on the daily chart are comfortably holding in the positive territory and are still far from the overbought zone, a subsequent strength beyond the $2,748-2,750 hurdle should pave the way for additional gains. Gold prices might then aim to challenge the all-time tops, around the $2,790 area touched in October 2024.

On the flip side, any corrective slide might now be seen as a buying opportunity and remain limited near the $2,725-2,720 region. The next relevant support is pegged near the $2,700-2,690 area, which if broken decisively might trigger aggressive technical selling and drag Gold prices towards the $2,660 zone en-route the $2,625 confluence point. The confluence comprises of the 100-day Exponential Moving Average (EMA) and an ascending trend-line extending from November swing lows, which in turn, should act as a key pivot point and help determine the next leg of a directional move for XAU/USD. (AL)

Source: FXstreet